What is Marginal Analysis?

The term marginal analysis refers to analyzing the additional benefits of something in comparison to the additional cost. For example, a company with limited resources has two printers that need repaired at an estimated cost of $2000. The company has found a new printer for $2300. The company decides to purchase the new printer although more costly because they consider it more cost effective. The current printers are 12 years old and will more than likely need additional repairs in the near future. The company did a marginal analysis and concluded the purchase of a new printer was the best decision. For more information, look here: